Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Pretax loss and the components of income tax benefit

The tables below show the pretax loss and the components of income tax expense for the following periods:



	Year Ended December 31,
	2019			2018
	(in millions)
Pretax Loss	$	(943	)	$	(1,003	)

Components of Income Tax Expense
Current
Federal	$	—		$	—
State	—			—
	$	—		$	—

Deferred
Federal	$	—		$	—
State	—			—
Total income tax expense	$	—		$	—

Effective tax rate reconciliation

Our income taxes included in net income differ from the amount computed by applying the statutory federal income tax rate of 21% for the following reasons:



	Year Ended December 31,
	2019			2018
	(in millions)
Income taxes at the statutory federal rate	$	198		$	211
Increase (decrease)
State income taxes, net of federal income tax effect	11			8
Change in valuation allowance	(207		)	(213		)
Capital loss expiration	—			(5		)
Other	(2		)	(1		)
Income tax expense	$	—		$	—

Components of deferred tax assets and liabilities

The following are the components of net deferred tax assets and liabilities:



	December 31, 2019			December 31, 2018
	(in millions)
Deferred tax assets
Property, plant and equipment	$	238		$	157
Net operating loss carryovers	642			611
Employee benefits	1			2
Lease obligations	4			—
Legal and other reserves	17			9
Asset retirement obligations	10			9
Interest deduction limitation	125			76
Transaction costs	33			14
Total deferred tax assets	1,070			878
Valuation allowance	(1,064		)	(857		)
Net deferred tax assets	6			21

Deferred tax liabilities
Operating lease assets	4			—
Financial derivatives	2			21
Total deferred tax liabilities	6			21
Net deferred tax liabilities	$	—		$	—

Federal and state net operating loss and tax credit carryovers

The table below presents the details of our federal and state net operating loss carryover periods as of December 31, 2019 (in millions):



	Expiration Period
	2031 - 2037		No expiration⁽¹⁾		Total
U.S. federal net operating loss carryover⁽¹⁾	$	2,524	$	429	$	2,953



	2026 - 2038
State net operating loss carryover	$	480


(1)	U.S. federal net operating loss carryovers generated since 2018 do not expire but are limited to 80% of taxable income per year.